Royal Mail bid to limit postcode address file use

The Royal Mail is bound by statute to license ‘on reasonable terms’ the use of its database of 27 million postal address records and 1.7 million postcodes. In this recent case, it sued a licensee for allegedly overstepping the mark.

Topic: Direct marketing

Who: Royal Mail Group Plc v I-CD Publishing (UK) Limited

Where: Chancery Division of the High Court, London

When: February 2004

What happened:

The Royal Mail tried unsuccessfully to limit use being made of its "postcode address file" (PAF).

The story starts with the Postal Services Act 2000. Section 116 imposes an obligation on the Royal Mail to maintain the PAF, which includes 27 million postal address records and 1.7 million postcodes, and to licence it on reasonable terms to any person who wishes to use it.

The defendant in this case, I-CD Publishing (UK) Limited, better known as 192.com, took out what looks to have been a standard Royal Mail PAF licence. This provided that nothing in the licence should prevent the end user from using PAF to modify "existing mailing list databases." It was this phrase that the ensuing dispute was all about.

192.com then used its licence to validate "UK info" databases it supplied on CD Rom to third parties. The attraction of the product was that it provided instant access to a complete directory of everyone of voting age in the UK. It could be used for a variety of purposes, not just as a mailing list.

The Royal Mail challenged this validation process, saying this was not covered by the end user licence. This made 192.com's use of the PAF for this purpose a breach of the Royal Mail's database rights, it alleged, and Royal Mail sued 192.com for damages.

The key question of whether their licence from the Royal Mail actually allowed ICD to do what they were doing came up as a preliminary issue.

At the time that 192.com supplied its customers with the validated "UK Info" CD Rom, the product was not necessarily for use exclusively as a mailing list. Royal Mail said that to come within the "existing mailing list" wording of the licence, the list being validated against the PAF had to be for supply purely as a mailing list, not for any other purpose.

192.com defended on the basis that the wording of the licence was wide enough to cover validation against the PAF of any list capable of being used as a mailing list.

In his judgement Lloyd J found in favour of 192.com. He said that the relevant clause in the Royal Mail licence sought to strike a balance between limiting the use to be made of the Royal Mail's intellectual property and allowing the information to be used to encourage the updating of mailing lists. To interpret the phrase "existing mailing list" in the narrow way suggested by the Royal Mail would make the licence unworkable, so the Royal Mail claim failed.

Why this matters:

The Royal Mail is already reported to be reviewing its PAF licence terms, perhaps with a view to tightening the wording so as to prevent the practice cleared by the court in this case. Under the Postal Services Act 2000, however, the Royal Mail must ensure that the terms of the licences by which it allows the use of the PAF are "reasonable", and it will have to bear this in mind before changing the user terms.